Garza v. Alejandro E. Villarreal Jr.

• Decision Date: 13 April 2011
• Docket Number: No. 04–09–00750–CV.,04–09–00750–CV.
• Citation: 345 S.W.3d 473
• Parties: Anastacio G. GARZA and Barbara T. Garza, Appellants,v.Alejandro E. VILLARREAL Jr., Alfonso J. Garza, Pedro A. Gonzalez, Olga V. Guinee, Cristobal Villarreal, and Huisache Cattle Company, Ltd., Appellees.
• Court: Texas Court of Appeals

345 S.W.3d 473

Anastacio G. GARZA and Barbara T. Garza, Appellants,

v.Alejandro E. VILLARREAL Jr., Alfonso J. Garza, Pedro A. Gonzalez, Olga

v. Guinee, Cristobal Villarreal, and Huisache Cattle Company, Ltd., Appellees.

No. 04–09–00750–CV.

Court of Appeals of Texas, San Antonio.

Feb. 2, 2011.Rehearing Overruled April 13, 2011.

Jacqueline M. Stroh, The Law Office of Jacqueline M. Stroh, P.C., San Antonio, TX, for Appellants.Alejandro E. Villarreal, III, Mark D. Willett, Raul Leal, Person, Whitworth, Ramos, Borchers & Morales, Laredo, TX, Laura A. Cavaretta, Plunkett & Gibson, Inc., San Antonio, TX, for Appellees.Sitting: KAREN ANGELINI, Justice, PHYLIS J. SPEEDLIN, Justice, REBECCA SIMMONS, Justice.

OPINION

Opinion by: KAREN ANGELINI, Justice.

The parties in this case are owners of tracts of land in the Zeferino Villarreal Pasture of the El Huisache Ranch located in Webb County, Texas. Appellant Anastacio G. Garza ¹ brought claims against Alejandro E. Villarreal Jr., Alfonso J. Garza, Pedro A. Gonzalez, Olga V. Guinee, and Cristobal Villarreal, (hereinafter referred to collectively as “the Villarreals”), and against Huisache Cattle Company, Ltd. to enforce a right of first refusal or “preference right” as to the sale of land in the El Huisache Ranch. The Villarreals responded to the suit, asserting Garza had already assigned his preference right to Huisache. The parties went to mediation, agreed to settle their claims, and executed a settlement agreement that met the requisites of Rule 11 of the Texas Rules of Civil Procedure. Thereafter, a dispute arose concerning the meaning of paragraph 3 of the agreement, which, among other things, suspends the preference right requirement for some transactions. The Villarreals and Huisache filed a motion to enforce the settlement agreement. Garza filed a motion to enforce or to clarify the settlement agreement. The trial court held a hearing, granted the Villarreals's and Huisache's motion to enforce, and ordered Garza to pay attorney's fees incurred in prosecuting the motion to enforce the settlement agreement. The trial court later signed a final judgment implementing the settlement agreement and Garza appealed.

On appeal, Garza argues the trial court's judgment must be reversed because the parties did not intend Huisache to be included in paragraph 3 of the agreement. He also argues (1) the settlement agreement is unenforceable because it lacks consideration, (2) the settlement agreement is unenforceable because of mutual mistake, (3) the trial court should have granted his motion to clarify the settlement agreement, and (4) the trial court erred in awarding attorney's fees. We reverse the judgment as to attorney's fees, but affirm the judgment in all other respects.

Background

A detailed explanation of the background facts is necessary to understand and analyze the issues presented in this case.

1. The Creation and Assignment of Preference Rights

In 1987, the owners of the Zeferino Villarreal Pasture of the El Huisache Ranch executed a partition deed, which partitioned the ranch's surface acreage into five shares. At the time, all of the owners were members of the Villarreal family. The deed contained a right of first refusal clause entitled “Preference Right.” This preference right clause granted each interest owner the right to purchase any other interest owner's share in the El Huisache Ranch upon the same terms as offered another potential buyer. The deed required interest owners contemplating a sale of any share of the El Huisache Ranch to notify the other interest owners of the terms of any potential sale, and give them the opportunity to purchase the share under the same terms.

In 1988, Huisache, which was not a party to the 1987 partition deed, purchased share five of the El Huisache Ranch.

In 1993, the appellant in this case, Garza, inherited part of share one of the El Huisache Ranch. A year later, in 1994, Garza and Huisache entered into a transaction, whereby Garza and Huisache sold and exchanged several tracts of land. As part of this transaction, Garza executed a document entitled, “Irrevocable Assignment of Preference Right.” In the document, Garza purported to transfer all of his preference rights to Huisache. The assignment stated it was irrevocable.

In 2007, Garza inherited part of share three of the El Huisache Ranch. Alejandro E. Villarreal Jr., Alfonso J. Garza, Pedro A. Gonzalez, and Olga V. Guinee, who also inherited part of share three of the El Huisache Ranch, agreed to sell their interests in share three to Cristobal Villarreal. However, Garza desired to buy these interests. When Garza notified Alejandro E. Villarreal Jr., Alfonso J. Garza, Pedro A. Gonzalez, and Olga V. Guinee that he was exercising his preference right to their interests in share three, they refused to sell their interests to Garza.

In 2008, Garza signed a document purporting to revoke his “Irrevocable Assignment of Preference Right.” Garza took the position that the preference right was not assignable under the terms of the deed, and therefore, the “Irrevocable Assignment of Preference Right” previously executed by him was void.

2. The Underlying Lawsuit and the Mediated Settlement Agreement

On October 26, 2007, Garza filed the underlying suit seeking to enforce the preference right contained in the 1987 partition deed. The suit included claims for specific performance and breach of contract against Alejandro E. Villarreal Jr., Alfonso J. Garza, Pedro A. Gonzalez, and Olga V. Guinee. In response, Alejandro E. Villarreal Jr., Alfonso J. Garza, Pedro A. Gonzalez, and Olga V. Guinee, maintained that the preference right claimed by Garza was owned by Huisache by virtue of the “Irrevocable Assignment of Preference Right” signed in 1994.

Garza then amended his pleadings to (1) include Huisache as a party, (2) add a claim for declaratory judgment, and (3) add claims for conspiracy and fraud in the inducement and execution of the “Irrevocable Assignment of Preference Right” against Huisache. The declaratory judgment claim requested interpretation of the preference right clause in the 1987 partition deed as it related to the assignment of such rights. The Villarreals and Huisache countered by amending their pleadings to add a counterclaim for declaratory judgment as to the parties' rights, status, and legal relations with regard to the “Irrevocable Assignment of Preference Right.”

Eventually, the parties went to mediation, agreed to settle their claims, and executed a Rule 11 settlement agreement.

3. The Enforcement Proceedings

When a dispute arose concerning the meaning of the second sentence in paragraph 3 of the agreement, the parties filed competing motions to enforce the settlement agreement. The disputed sentence states: “Further, the Parties agree tha[t] an exchange or swap of lands between owners of the lands covered by the 1987 Partition Deed shall not trigger the applicability of the preference rights provision set forth in the 1987 Partition Deed with regard to said swapped or exchanged lands.”

In their motion to enforce the settlement agreement, the Villarreals and Huisache alleged the parties' settlement agreement was a binding and enforceable contract. The Villarreals and Huisache alleged Garza breached the settlement agreement by failing to execute the “Waiver of Preference Right” document in accordance with the terms of the agreement. The Villarreals and Huisache asked the trial court to order Garza to (1) execute the “Waiver of Preference Right” document, (2) execute all documents necessary to effectuate the terms of the settlement agreement, and (3) pay attorney's fees related to the enforcement motion. The motion also asked the trial court for further relief to which the Villarreals and Huisache showed themselves entitled to receive.

Garza also filed a motion to enforce or clarify the settlement agreement. Garza asserted the parties to the mediated settlement agreement “did not intend for Paragraph 3 to be interpreted to mean that Huisache [ ] is a preference right holder and entitled to be a party to that specific agreement.” Garza further asked the trial court to interpret the 1987 partition deed and to “clarify and/or interpret the meaning of Paragraph 3.”

At the enforcement hearing, Huisache asked the court to enforce the terms of the settlement agreement and to order Garza to sign the “Waiver of Preference Right” document. Huisache called one of its lawyers, Raul Leal, who testified about why the parties included paragraph 3 in the settlement agreement. For his part, Garza called an expert witness who testified about the meaning of the 1987 partition deed, and provided his legal opinion that Huisache could not have acquired any preference rights through its purchase of tracts covered by the 1987 partition deed. Garza also explained that he refused to sign the “Waiver of Preference Right” because it was unnecessary and because it attempted to confer a preference right on Huisache which it did not have under the 1987 partition deed. Both parties also called witnesses who testified about attorney's fees.

The trial court granted Huisache's motion for enforcement and denied Garza's motion to enforce or clarify. The trial court found that Garza breached the terms of the settlement agreement by his failure to recognize and acknowledge that (1) Huisache is one of the parties as that term is defined and used in the settlement agreement, (2) Huisache is one of the owners of the lands covered by the 1987 partition deed, and (3) an exchange or swap of lands between owners of the lands covered by the 1987 Partition Deed, including Huisache, shall not trigger the applicability of the preference right provision in the 1987 Partition Deed with regard to said swapped or exchanged lands. The trial court also awarded the Villarreals and Huisache $3,500.00 in attorney's fees for prosecuting their motion to enforce. The trial court, however, did not order...